With shares of Michael Kors Holdings Limited (NYSE:KORS) trading at around $62.00, is KORS an OUTPERFORM, WAIT AND SEE or STAY AWAY? Let’s analyze the stock with the relevant sections of our CHEAT SHEET investing framework:
C = Catalyst for the Stock’s Movement
If you haven’t yet heard of Michael Kors, then you will soon. If you’re not sure what this company is all about, then it’s recommended that you check out their website. You will immediately see that Michael Kors is about luxury with a cool attitude. It’s also a company that’s putting fear into its competitors. The biggest competitor is Coach (NYSE:COH). At the moment, Michael Kors has all the momentum, and that might continue for quite some time, but in the long run, it will even out. It almost always does when two heavyweights go toe-to-toe.
As far as earnings go, Michael Kors keeps on winning. Q3 EPS came in at $0.64 versus an average expectation of $0.41. Q3 revenue increased 70 percent to $636.8 million. The average expectation? — $540.3 million. That’s the epitome of blowout earnings. Net sales increased 41 percent year over year, which had a lot to do with strong demand during the holiday season. Same-store sales increased 44 percent. Retail sales increased 67 percent to $332.6 million. Wholesale sales increased 77.4 percent to $274.3 million.
If that’s not enough good news for you, then consider taking a gander at guidance. FY2013 EPS is expected to come in between $1.80 and $1.82. The original expectation was between $1.48 and $1.50. FY2013 revenue is expected to come in at $2.1 billion. The original expectation was between $1.86 billion and $1.96 billion.
Let’s take a look at some more important numbers prior to forming an opinion on this stock…